Open Interest and Volume Dynamics
On 4 Feb 2026, Persistent Systems recorded an open interest (OI) of 37,675 contracts in its derivatives, up from 30,920 the previous day, marking a robust increase of 6,755 contracts or 21.85%. This rise in OI was accompanied by a volume of 31,143 contracts, indicating strong participation in the futures and options market. The futures segment alone accounted for a value of approximately ₹29,651 lakhs, while the options segment's notional value was substantially higher at ₹15,950.19 crores, reflecting the stock's active options trading environment.
The total traded value in derivatives stood at ₹32,844 lakhs, underscoring the liquidity and investor interest in Persistent Systems’ contracts. The underlying stock price closed at ₹5,875, having opened with a gap down of 3.48% and touched an intraday low of ₹5,804, a decline of 7.56% from the previous close. Notably, the weighted average price of traded contracts clustered near the day's low, suggesting that the bulk of trading activity occurred at depressed price levels.
Market Positioning and Directional Bets
The surge in open interest amid a falling stock price typically indicates that new short positions are being established or that existing longs are being unwound. In Persistent Systems’ case, the stock underperformed its sector, IT - Software, which itself declined by 4.96%, while the Sensex marginally gained 0.16%. The stock’s 1-day return was -6.32%, exceeding the sector’s negative return, signalling sharper downside pressure.
Technical indicators reveal that Persistent Systems remains above its 200-day moving average, a long-term bullish sign, but trades below its 5-day, 20-day, 50-day, and 100-day moving averages, reflecting short- to medium-term weakness. This mixed technical picture may be prompting traders to hedge or speculate on further downside in the near term.
Investor participation in the cash segment has also waned, with delivery volumes falling by 19% to 1.91 lakh shares on 3 Feb compared to the five-day average. This decline in delivery volume suggests reduced conviction among long-term investors, potentially increasing volatility in the derivatives market as traders take more active positions.
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Mojo Score and Analyst Ratings
Persistent Systems currently holds a Mojo Score of 77.0, categorised as a Buy, a slight downgrade from its previous Strong Buy rating on 27 Jan 2026. This adjustment reflects the recent price weakness and increased volatility, though the company’s fundamentals remain solid within the Computers - Software & Consulting sector. The market capitalisation stands at ₹99,014 crore, placing it firmly in the mid-cap category with a Market Cap Grade of 2.
Despite the recent price correction, the stock’s liquidity remains adequate, with a trade size capacity of approximately ₹4.86 crore based on 2% of the five-day average traded value. This ensures that institutional and retail investors can execute sizeable trades without significant market impact.
Sectoral and Broader Market Context
The IT - Software sector has been under pressure, declining nearly 5% on the day, weighed down by profit booking and cautious sentiment ahead of upcoming earnings announcements. Persistent Systems’ sharper decline relative to its sector peers suggests company-specific factors or positioning shifts in derivatives may be influencing price action.
Open interest data often provides a window into market expectations. The 21.85% increase in OI, coupled with a volume that closely matches the OI level, indicates fresh positions are being taken rather than existing ones being closed out. Given the stock’s price decline and volume concentration near lows, it is plausible that traders are establishing bearish positions, anticipating further downside or volatility in the near term.
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Implications for Investors and Traders
The sudden spike in open interest amidst a falling stock price and subdued delivery volumes signals a shift in market sentiment towards a more cautious or bearish stance. Traders should closely monitor the evolving derivatives positioning, as sustained increases in OI with declining prices often precede further volatility or trend continuation.
Long-term investors may view the current weakness as a potential entry point, given Persistent Systems’ strong fundamentals and its position above the 200-day moving average. However, short-term traders should be wary of increased downside risk and consider hedging strategies or wait for confirmation of trend reversal before initiating fresh long positions.
Overall, the derivatives market activity in Persistent Systems reflects a complex interplay of profit-taking, speculative positioning, and hedging amid a challenging sectoral environment. The stock’s Mojo Grade downgrade from Strong Buy to Buy further emphasises the need for cautious optimism.
Looking Ahead
Investors should watch for upcoming quarterly results and sectoral developments that could influence Persistent Systems’ price trajectory. Additionally, tracking open interest trends and volume patterns in the derivatives segment will provide valuable insights into market expectations and potential directional moves.
Given the stock’s mid-cap status and active derivatives market, Persistent Systems remains a key name to watch within the Computers - Software & Consulting sector, especially as market participants recalibrate their positions in response to evolving fundamentals and technical signals.
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